Please note this post is for informational purposes only, please contact your accountant for tax advice.
It’s tax filing season and I wanted to share a couple tips for those business owners to try to make the tax season as painless as possible. What I usually do is reconcile all accounts. This means bank accounts and credit cards. Hopefully you’ve been doing this every month, but if you if you haven’t most credit card companies now offer year end summaries that groups all your purchases in categories so you just have to give that to your tax preparer.
Next, review your income. Is everthing that got deposited into your account income for last year? For example, where there loans, deposits, retainers? Any deposits or retainers should be in separate accounts, but occasionally they’re entered incorrectly and end up being shown as income when they are not.
Next is expenses. Is everything you paid out accounted for correctly? Is everything an expense or are their repayment of loans or equity? Did the owner take any distributions? If so, was this income or a return of equity? Did you have any payments to subcontractors or employees? If so you will have to file the correct forms to document those payments.
Lastly, take a step back and review you company set up, customer and profit and loss. Is there anything you would like to track better this year? What customers still owe you money? Is your company set up correctly to limit liability to the owners and employees?
Please contact me with any questions. Did I miss anything? Anything you think deserves it’s own post?